AMC Stock Forecast for 2022 According to Expert Predictions

AMC stock forecast 2022

In the year 2021, the shares of AMC Entertainment (NYSE:AMC) saw phenomenal success. This sparked a trading frenzy among investors who urged each other to purchase and hold AMC shares. However, the effects of the pandemic severely dented AMC’s theatre chain operations for most of the year. The AMC stock forecast for 2022 doesn’t look very bullish. As per expert predictions, the company would be unable to replicate the same YoY growth rate it achieved in 2021. Consequently, experts are urging investors to separate themselves from the stock in 2022. Before deep-diving into the reasons behind that, let us first give you an overview of the company.

About the Company

AMC Entertainment Holdings, Inc. (NYSE:AMC) is involved in the theatre exhibition industry via its subsidiaries. The company has roughly 1000 theatres to go with 10,700 screens in the United States & the rest of the world, according to the most recent available data. The corporation was established in 1920 and is headquartered in Kansas.

Find out more information on AMC Entertainment Holdings (NYSE: AMC)

Why are expert predictions favoring the idea of selling the AMC stock in 2022?

A. The stock is overpriced

Despite plunging about 60% from 52-week highs, AMC’s stock is up nearly 1,300% for the year because of the short squeeze price increase. The rise was unrelated to the health of the business, considering that AMC’s theatre attendance remained flat year-on-year in the nine months ending September 30, 2021. It was actually a group of retail traders who kept buying shares to drive this increase.

The AMC stock forecast indicates that it is highly unlikely that the company will make a profit after losing $1.2 billion in the nine months of 2021. The corporation was already struggling to make a profit in the pre-pandemic period, and now with the Omicron variant continuing to pose a major threat, there seem to be even tougher times ahead. Some AMC managers selling their shares is also a testament to the fact that the stock is quite expensive.

B. The company’s balance sheet doesn’t look that great

The pandemic led to all of AMC’s theatres being shuttered. That being said, the management performed a great job of raising money to get the firm through until it could reopen. However, the actions taken to generate money have placed AMC’s balance sheet in jeopardy. There is $5.4 billion in long-term debt that costs the corporation millions of dollars in interest each year.

When the time comes to pay the principal sums, AMC is unlikely to have the funds available. It will try to get a loan to pay off the debt. Toward the conclusion of the third quarter of 2021, AMC had $1.6 billion in the bank. This number is likely to decline further in the near future.

C. The industry is running out of steam

Even before COVID-19, the movie theatre sector was on a decline. Stakeholders were sluggish to adjust to shifting consumer tastes. Movie theatres have had less innovation than any other sector in the previous two decades.

The cost of movie-going rose dramatically while the average moviegoer’s experience stayed the same. The average movie ticket in the US went from $5.66 in 2001 to $9.37 in 2020, excluding 2021 increases.

Consequently, movie ticket sales have continuously declined from 1.48 billion in 2001 to 1.24 billion in 2019,. Unless the movie theatre sector improves the consumer value offer, the downward trend will continue for certain.

Final word

The AMC stock forecast indicates that the corporation’s short and long-term business prospects appear to be very bleak. The company’s financial situation is in jeopardy. According to expert predictions, it will be difficult for AMC to defend the high stock price with higher profits since it is now expensive. Prudent investors will steer clear of AMC stock, and if you already own it, now is a great moment to get rid of your holdings.

We hope you found this article on AMC stock helpful. If you want to track the performance of this company, add it to your watchlist here. And don’t forget to follow our Youtube channel to view useful investing videos. Thanks for reading.

 

Disclaimer:

Rich Picks Daily company profiles and other investor relations materials, publications, or presentations, including web content, are based on data obtained from sources we believe to be reliable but are not guaranteed as to the accuracy and are not purported to be complete.

As such, no one must construe the information as advice designed to meet the particular investment needs of any investor. Any opinions expressed in Rich Picks Daily reports company profiles or other investor relations materials and presentations are subject to change. Rich Picks Daily & RICH TV LIVE and its affiliates may buy and sell shares of securities or options of the issuers mentioned on this website at any time.

Investing is inherently risky. Rich Picks Daily is not responsible for any gains or losses that result from the opinions expressed on this website, in its research reports, company profiles or in other investor relations materials or presentations that it publishes electronically or in print.

We strongly encourage all investors to conduct their own research before making any investment decision. For more information on stock market investing, visit the Securities and Exchange Commission (“SEC”) at www.sec.gov/Canadian CSA https://www.securities-administrators….

 

Latest Articles


By Fool Co, August 7, 2022
2 Stocks I Own an...

No Comments

Post a Comment

Enter your email address to
subscribe to our newsletter

Top 10 Picks Of The Month

Market Movers